PPC.L Regulatory News (PPC)

26 Jun 2007 07:10

Meridian Petroleum PLC26 June 2007 26 June 2007 MERIDIAN PETROLEUM PLC ("Meridian" or the "Company") 2006 PRELIMINARY RESULTS Meridian Petroleum, (AIM: MRP) the independent oil and gas exploration andproduction company with key assets in the USA and Australia, today announcespreliminary results for the year ended 31 December 2006. Highlights - Contingent and Prospective Resources of the Group independently assessed as 732 - 882 bcf (2005 434 bcf) - Deep gas rights acquired at Calvin Field adding 58 bcf contingent resources. 50/50 joint venture with Ensight signed - Prospective resources of the Alabama Coal Bed Methane prospect assessed as 240 - 390 bcf - Lease signed at Orion field, Michigan - Board strengthened in the year and early 2007 with Angelo Baskaran joining as Chief Financial Officer and Stephen Gutteridge joining as Non-executive Chairman Post-period highlights - Raised £1.78 million via a placing to continue development of the Company - Native Title Agreement finalised, allowing PEL grant in Australia - Production due to commence in second half of Q3 2007 Tony Mason, CEO of Meridian Petroleum, "We gained further progress in 2006 whichI am pleased to confirm has continued into 2007. We expect these achievementsto deliver production and cash flow in the second half of 2007 and mark a significant step in the growth of the Company." For further information contact: Meridian Petroleum Plc Ambrian Partners Parkgreen CommunicationsStephen Gutteridge, Neil Maclachlan / Tim Clare Irvine / EricaChairman Goodman Nelson+44 (0) 20 78110140 +44 (0) 20 7776 6400 +44 (0) 20 7851 7480Tony Mason, CEO+1 713 599 1611 MERIDIAN PETROLEUM PLC2006 PRELIMINARY RESULTS Chairman's Statement Having joined Meridian Petroleum plc as Chairman in April 2007, I am happy tolet Tony Mason, Chief Executive, update our shareholders on the events of 2006in his Statement and Review of Operations. I am however delighted to have thisearly opportunity to put on record my own perspective on your Company'spotential. In terms of market capitalisation, Meridian Petroleum is currently a smallcompany, but one which owns three potentially significant gas-producing assets -the Calvin Deep and Coal Bed Methane prospects in the USA and the Deloresprospect in Australia. The Board of Meridian is committed to putting in placerealistic and well-resourced plans to deliver value from these assets at theearliest opportunity. In order to achieve this we needed to strengthen ourfinancial position by generating our own cashflow from production and raisingfurther money from our shareholders. The latter we have achieved through thefurther placing of shares in June 2007, and we enter the second half of thisyear with three gas wells about to come on-stream. We now have the platform to move forward on our major assets, any one of whichis capable of transforming the prospects and value of the company. The fact thateach of these opportunities is different in terms of the challenges, risks andpotential rewards, makes this a fascinating time for Meridian Petroleum and itsshareholders. Stephen GutteridgeNon-Executive Chairman26 June 2007 MERIDIAN PETROLEUM PLC2006 PRELIMINARY RESULTS Chief Executive Officer's Statement and Review of Operations 2006 was a year of further progress for Meridian Petroleum, and I am pleased toconfirm that progress has continued through into 2007. Indeed, we expect thatthe achievements of 2006 will deliver production and cash flow for the companyin the second half of 2007. During 2006, despite some frustrating delays, we signed the lease on the Orionfield and confirmed the commerciality of the Calvin 36 well. Both of theseassets are expected to contribute to production in 2007. In May 2006 we received independent assessments from Scott Pickford (part of RPSEnergy) on two of our potentially most significant assets. The ProspectiveResources of our Delores prospect in Australia was confirmed to have a bestestimate of 432 Bcf. For our Coal Bed Methane opportunity in Alabama, USA, theyestimated prospective reserves at 240-390 Bcf. Through the second half of 2006, the Company continued to increase its assetsand make progress with its plans to exploit existing opportunities. In July, therights to exploit the deep gas potential in the Calvin field were acquired andin order to move the development programme forward, a 50/50 joint venture withEnsight Partners was signed in November. Ensight bring significant localexpertise and experience to the asset and are located in Shreveport, LouisianaUSA. Also in July 2006, the Company signed the Native Title Agreement for the PEL 132Licence in Australia which contains the Delores prospect. This was followed bythe official execution of the Agreement by the South Australian Government inApril 2007. There were challenges in 2006. In a tight market it became increasinglydifficult and costly to obtain the equipment and technical skills needed by theCompany to sustain its development plans. We also experienced operator problemson some wells, principally Calvin 36#1 and together these caused significantdelays to our plans. The Company is taking steps to ensure that the requiredlevel of resources is available for future needs. During the year the Companyraised $4.7 million by way of 3 share placements and more recently in 2007 theCompany raised a further $3.4 million. The Company's priorities for 2007 are very clear: to bring production on linefrom the US gas operations as soon as practicable and to dedicate the resourcesnecessary to move forward with the large opportunities of Calvin Deep, Coal BedMethane and Delores in Australia. As part of this prioritisation, the Boarddecided in 2006 not to expend further resources on the Emery Hudson field.Consequently this asset has been fully written off in the 2006 accounts. The Company has strengthened its Board in 2006 and early 2007, and I am pleasedto welcome Angelo Baskaran as Chief Financial Officer, Stephen Gutteridge asNon-Executive Chairman and David Wake-Walker as Non-Executive Director to theBoard. I would like to record my thanks to Don Caldwell who has stepped down asChairman but remains with us as a Non-Executive Director. My thanks also go toour Board, staff and contractors who have all contributed to our progress thisyear. In 2007 we are on track to join the small group of AIM-listed oil and gascompanies with production and this will mark a significant step in the growth ofMeridian. We will use that base to ensure effective and timely exploitation ofour attractive assets in the US and Australia. Tony MasonChief Executive Officer26 June 2007 MERIDIAN PETROLEUM PLC2006 PRELIMINARY RESULTS Consolidated Income Statement Year ended 31 December 2006 Note 2006 2005 US $000 US $000 Revenue 8 160 Cost of salesProduction costs (63) (225) --------- -------- Gross loss (55) (65) Administrative expenses (1,845) (1,225)Impairment charge 2 (4,065) (390) --------- -------- Operating loss (5,965) (1,680) Investment Income - interest on bank deposits 21 32 --------- -------- Loss before taxation (5,944) (1,648) Taxation - - --------- -------- Loss for the year attributable to equity shareholders (5,944) (1,648) ========= ======== Loss per share - basic and diluted (cents) 3 (8.3) (2.7) ========= ======== MERIDIAN PETROLEUM PLC2006 PRELIMINARY RESULTS Statement of recognised income and expenditure Year ended 31 December 2006 2006 2005 US $000 US $000 Total (expense)/income recognised direct in equityCurrency translation differences- gain/(loss) 105 (118) Loss for year (5,944) (1,648) -------- ---------Total recognised income and expense for the year (5,893) (1,766) ======== ========= MERIDIAN PETROLEUM PLC2006 PRELIMINARY RESULTS Consolidated balance sheet 31 December 2006 Note 2006 2005 US $000 US $000Non-current assets Intangible assets 646 424Property, plant and equipment 2 2,020 5,398 ------- ------- 2,666 5,822 ------- ------- Current assets Trade and other receivables 234 141Cash and cash equivalents 2,332 370 ------- ------- 2,566 511 ------- ------- Total assets 5,232 6,333 ======= ======= Current liabilities Trade and other payables 211 298 ------- ------- Total liabilities 211 298 ======= ======= Net assets 5,021 6,035 ======= ======= EquityCalled up share capital 7,362 5,925Share premium 6,565 3,316Retained earnings (9,157) (3,213)Translation reserve 112 7Other reserves 139 - -------- -------Total equity attributable to the equity holders 5,021 6,035 ======== ======= MERIDIAN PETROLEUM PLC2006 PRELIMINARY RESULTS Consolidated Cash Flow StatementYear ended 31 December 2006 Note 2006 2005 US $000 US $000Cash flows from operating activities Cash consumed by operations 4 (1,953) (1,036) Interest received 21 32 ======== ======== (1,932) (1,004) -------- -------- Cash flows from investing activities Expenditure on exploration and evaluation assets (459) (807) Expenditure on development and production assets (450) (382) -------- -------- (909) (1,189) -------- -------- Cash flows from financing activities Proceeds from issue of shares 4,685 1,189 -------- -------- Net increase/(decrease) in cash and cash equivalents 1,844 (1,004) Opening cash and cash equivalents at beginning of year 370 1,430 Exchange gains/(losses) on cash and cash equivalents 119 (56) -------- -------- Closing cash and cash equivalents 2,332 370 MERIDIAN PETROLEUM PLC2006 PRELIMINARY RESULTS 1. Accounting policies and basis of preparation The financial information set out in this announcement does not constitute theCompany's statutory accounts for the years ended 31 December 2006 or 2005 but isderived from the 2006 accounts. Statutory accounts for 2005, which were preparedunder UK Generally Accepted Accounting Practice (UK GAAP) and upon which theauditors issued a modified opinion, have been delivered to the Registrar ofCompanies. Statutory accounts for 2006, prepared under International FinancialReporting Standards (IFRS) as adopted for use in the EU, will be delivered indue course. The auditors have reported on those accounts; their reports were (i)unqualified, (ii) did not include references to any matters to which theauditors drew attention by way of emphasis without qualifying their reports and(iii) did not contain statements under section 237 (2) or (3) of the CompaniesAct 1985. The accounting policies adopted for use in the preparation of the 2006Preliminary Results and the 2006 Annual Financial Statements were included inthe Interim Results for the six months ended 30 June 2006 released on 26 June2007. The disclosures and reconciliations for first time adoption of IFRS areincluded in those Interim Results and in the Annual Report for the year ended 31December 2006. The Annual Report will be sent out to shareholders on 29 June 2007 2. Property, plant and equipment - Impairment charge The Directors commissioned a detailed review of the Group's reserves by theirconsultants RPS Energy. On the basis of consultation with RPS Energy, inconjunction with a review of other data available, they have taken the view thatthe Emery Hudson field is impaired and that expending further resources ondeveloping the field will not be commercially viable. Accordingly an impairmentcharge of $4,065,000 has been made to reduce the carrying value of the asset tonil. MERIDIAN PETROLEUM PLC2006 PRELIMINARY RESULTS 3. Loss per Share Loss 2006 2005 US $000 US $000 Loss for the purposes of basic earnings per sharebeing net loss attributable to equity holders of theparent 5,944 1,648 ========== ========= Number NumberNumber of sharesWeighted average number of ordinary shares for thepurposes of basic and diluted loss per share 71,310,566 59,490,453 ========== ========= 4. Notes to the cash flow statement 2006 2005 US $000 US $000 Loss from operations (5,965) (1,680)Adjustments for: Depreciation and impairment of property, plant andequipment 4,065 454Amortisation of intangible assets - -Share based payment 139 -Foreign exchange difference (13) (142) -------- --------- Operating cash flows before movements in working capital (1,774) (1,368) (Increase)/decrease in receivables (80) 454(Decrease)/increase in payables (100) (122) -------- --------- Net cash consumed by operating activities (1,953) (1,036) ======== ========= This information is provided by RNS The company news service from the London Stock Exchange